Bitcoin Bear Markets – We’ve Been Here Before

Nothing to fear but these times can be stressful for newcomers – after time you’ll become hardened and cast these bear markets off like a pro


Firstly, concerning the above ‘four-year HODLer’ statistic, while it’s fair to say that specific cherry-picked individuals are down over a four-year period, it’s still true that all four-year regular stackers are up. Why is this so? Because people’s memories seem to be distorted to the highs of cycles.

So, for example, a lot of people are mentally anchoring to the 2017 top around $20,000, as though that was the price for the whole of 2017. But the reality is that bitcoin spent about 75% of 2017 under $5,000, and about 90% of 2017 under $10,000. So, if you were consistently long-term stacking, you are still up. You would have been accumulating all the way through, and in those times where bitcoin’s price was low (e.g., December 2018 or March 2020, around $3,000 to $4,000), you were accumulating more satoshis for your fiat. And now we have companies like Swan Bitcoin that explicitly help customers regularly stack sats with a long-term focus.

While the macro environment is challenging, investors worldwide are struggling to find a place to store their wealth. So, while the 60/40 stocks and bonds portfolio is having some of its worst times on record, and inflation is running high all around the world, this is precisely the time that traditional investors will be open to reconsidering their allocations. It’s also fair to say that bitcoin has already gone through its deleveraging cycle, while the pain in other asset classes may still continue. With all this pain in the bond markets, it’s completely reasonable for bond investors to decide they’d rather purchase some bitcoin, an asset that can’t be easily manipulated by governments and central banks around the world.

There’s another silver lining: people get another chance to stack cheaply. Those who say ‘early Bitcoiners had an unfair opportunity to get coins cheap or easy’ have less ground to stand on. Bitcoin right now is relatively cheap and it’s a great chance to take ownership of some sats and stack them in your cold storage.

Then, maybe in a few years time, people will look back and say how ‘lucky’ you were to be stacking in the $20,000 range. The reality of it is that any long-term HODLer or stacker has had to go through big peak-to-trough drawdowns.”


Master Asked on June 28, 2022 in Bitcoin.
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